OREANDA-NEWS. August 28, 2009. Rambler has released its 1H09 IFRS results, posting dramatic YoY decreases across the board. EBITDA declined over 80% YoY (in rouble terms) on the back of the top line dropping 18% YoY. EBITDA profitability has thus deteriorated to 4% (vs. 18% posted in 1H08).

The company announced that it was downgrading its FY09 revenue growth forecast from its previous guidance of flattish YoY to a 15% YoY decline (in rouble terms). This implies FY09 revenues decreasing to USD 71mn (down 35% in dollar terms) from the USD 110mn in 2008.

Banner ads accounted for 49% of Rambler Media’s 1H09 top-line. They decreased 12% YoY in rouble terms, slightly less than the 16% YoY banner market decline in 1Q09 (there is no data available for the Russian internet banner ad market trends for 1H09, only 1Q09 estimates released by the Russian Association of Advertisers).

Context revenues were down 24% YoY in rouble terms, contributing to the 62% of incremental fall in revenues, thus surprising on the downside. Their contribution to the overall top line declined from 45% in 1H08 to 41% in 1H09. We attribute the decline to Rambler Media’s websites losing their audience, as about 30% of revenues of Begun (a context internet ad placement agency which is 51%-owned by Rambler Media) come from Rambler. According to TNS-Gallup, the monthly audience of Rambler Media’s 32 websites declined 6% between December 2008 and June 2009, while the monthly internet audience of its flagship portal Rambler.ru declined 12% to 7.1mn over the same period. The dramatically deteriorating position in search traffic (4.2% in June 2009 vs. 11.4% in June 2008, according to www.live.ru) triggered the paid search queries outflow as well.

There was a negative surprise from margins: EBITDA, at only USD 1.1mn (down from USD 9.4mn in 1H08) was pressured by the 1% YoY increase in SG&A expenses (in rouble terms) while opex declined only 4%. Labour costs (35% of above-EBITDA costs) decreased 5% YoY, while contextual and banner TAC were down 10% YoY and 7% YoY respectively.

The company’s liquidity position has not changed from the end of 2008: its debt balance is still zero while its cash positions stood at USD 25mn.